Impairment of Assets - aasb.gov.au

1 compiled aasb Standard aasb 136 Impairment of Assets This compiled Standard applies to annual reporting periods beginning on or after 1 January 2010. Early application is permitted. It incorporates relevant amendments made up to and including 25 June 2009. Prepared on 1 December 2009 by the staff of the Australian Accounting Standards Board. aasb 136- compiled 2 COPYRIGHT Obtaining Copies of Accounting Standards compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the aasb website: Printed copies of original Standards and amending Standards are available for purchase by contacting: The Customer Service Officer Australian Accounting Standards Board Level 7 600 Bourke Street Melbourne Victoria AUSTRALIA Postal address: PO Box 204 Collins Street West Victoria 8007 AUSTRALIA Phone: (03) 9617 7637 Fax: (03) 9617 7608 E-mail: Website: Other Enquiries Phone: (03) 9617 7600 Fax: (03) 9617 7608 E-mail.

2 COPYRIGHT 2009 Commonwealth of Australia This compiled aasb Standard contains International Accounting Standards Committee Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007. All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.

3 Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the International Accounting Standards Committee Foundation at aasb 136- compiled 3 CONTENTS CONTENTS COMPILATION DETAILS COMPARISON WITH IAS 36 ACCOUNTING STANDARD aasb 136 Impairment OF Assets Paragraphs Objective 1 Application Scope 2 5 Definitions 6 Identifying an Asset that may be Impaired 7 17 Measuring Recoverable Amount 18 23 Measuring the Recoverable Amount of an Intangible Asset with an Indefinite Useful Life 24 Fair Value less Costs to Sell 25 29 Value in Use 30 Basis for Estimates of Future Cash Flows 33 38 Composition of Estimates of Future Cash Flows 39 53 Foreign Currency Future Cash Flows 54 Discount Rate 55 57 Recognising and Measuring an Impairment Loss 58 64 Cash-generating Units and Goodwill 65 Identifying the Cash-generating Unit to Which an Asset Belongs 66 73 Recoverable Amount and Carrying Amount of a Cash-generating Unit 74 79 Goodwill Allocating Goodwill to Cash-generating Units 80 87 Testing Cash-generating Units with Goodwill for

4 Impairment 88 90 Timing of Impairment Tests 96 99 Corporate Assets 100 103 Impairment Loss for a Cash-generating Unit 104 108 Reversing an Impairment Loss 109 116 Reversing an Impairment Loss for an Individual Asset 117 121 Reversing an Impairment Loss for a Cash-generating Unit 122 123 aasb 136- compiled 4 CONTENTS Reversing an Impairment Loss for Goodwill 124 125 Disclosure 126 133 Estimates used to Measure Recoverable Amounts of Cash-generating Units Containing Goodwill or Intangible Assets with Indefinite Useful Lives 134 137 Transitional Provisions and Effective Date 140C 140E Appendix: A. Using Present Value Techniques to Measure Value in Use Page 53 C.

5 Impairment Testing Cash-generating Units with Goodwill and Non-controlling Interests Page 60 ILLUSTRATIVE EXAMPLES Page 63 BASIS FOR CONCLUSIONS ON IAS 36 (available on the aasb website) Australian Accounting Standard aasb 136 Impairment of Assets (as amended) is set out in paragraphs 1 140E and Appendices A and C. All the paragraphs have equal authority. Terms defined in this Standard are in italics the first time they appear in the Standard. aasb 136 is to be read in the context of other Australian Accounting Standards, including aasb 1048 Interpretation and Application of Standards, which identifies the Australian Accounting Interpretations. In the absence of explicit guidance, aasb 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

6 aasb 136- compiled 5 COMPILATION DETAILS COMPILATION DETAILS Accounting Standard aasb 136 Impairment of Assets as amended This compiled Standard applies to annual reporting periods beginning on or after 1 January 2010. It takes into account amendments up to and including 25 June 2009 and was prepared on 1 December 2009 by the staff of the Australian Accounting Standards Board ( aasb ). This compilation is not a separate Accounting Standard made by the aasb . Instead, it is a representation of aasb 136 (July 2004) as amended by other Accounting Standards, which are listed in the Table below. Table of Standards Standard Date made Application date (annual reporting periods.)

7 On or after ..) Application, saving or transitional provisions aasb 136 15 Jul 2004 (beginning) 1 Jan 2005 aasb 2007-3 26 Feb 2007 (beginning) 1 Jan 2009 see (a) below aasb 2007-4 30 Apr 2007 (beginning) 1 Jul 2007 see (b) below aasb 2007-8 24 Sep 2007 (beginning) 1 Jan 2009 see (c) below aasb 2007-10 13 Dec 2007 (beginning) 1 Jan 2009 see (c) below aasb 2008-3 6 Mar 2008 (beginning) 1 Jul 2009 see (d) below aasb 2008-5 24 Jul 2008 (beginning) 1 Jan 2009 see (e) below aasb 2008-7 25 Jul 2008 (beginning) 1 Jan 2009 see (f) below aasb 2009-5 21 May 2009 (beginning) 1 Jan 2010 see (g) below aasb 2009-6 25 Jun 2009 (beginning) 1 Jan 2009 and (ending) 30 Jun 2009 see (h) below aasb 2009-7 25 Jun 2009 (beginning) 1 Jul 2009 see (i) below (a) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that aasb 8 Operating Segments is also applied to such periods.

8 (b) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2007. (c) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that aasb 101 Presentation of Financial Statements (September 2007) is also applied to such periods. (d) Entities may elect to apply this Standard to annual reporting periods beginning on or after 30 June 2007 but before 1 July 2009, provided that aasb 3 Business Combinations aasb 136- compiled 6 COMPILATION DETAILS (March 2008) and aasb 127 Consolidated and Separate Financial Statements (March 2008) are also applied to such periods.

9 (e) Paragraph 59 of this Standard specifies application provisions. Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009. (f) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009. (g) Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2010. (h) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that aasb 101 Presentation of Financial Statements (September 2007) is also applied to such periods, and to annual reporting periods beginning on or after 1 January 2009 that end before 30 June 2009.

10 (i) Entities may elect to apply this Standard to annual reporting periods beginning before 1 July 2009 that end on or after 1 July 2008. Table of Amendments to Standard Paragraph affected How affected By .. [paragraph] amended aasb 2007-8 [7, 8] amended aasb 2007-8 [8] 2 amended aasb 2008-5 [56] 5 amended aasb 2008-5 [56]